Texans for Affordable Healthcare Pushed Back on Costly New Rules
Texans for Affordable Healthcare (TAHC) recently submitted comments to the Texas Department of Insurance (TDI) opposing proposed changes to its network adequacy rules, warning that the rules would raise premiums and shrink affordable coverage options for Texas families and small businesses.
What the Proposed Rules Would Do
The proposed rules (§§3.3704 and 3.3707) would reshape how health plan networks are regulated in Texas in two significant ways.
New Network Standards That Increase Costs
The first is a new standard that would require insurers to guarantee access to a broader range of doctors and hospitals in every region, going beyond the federal network adequacy standard Texas already follows. That may sound consumer-friendly on paper, but it strips away the option to choose a smaller, lower-cost network. Consider that some families and small businesses rely on the ability to choose a plan with a smaller network because the lower cost is more affordable. For some small businesses, that affordability can mean the difference between being able to offer health insurance to employees and not being able to offer coverage at all. This rule would push those lower-cost options out of the market.
A One-Way Path to Higher Healthcare Prices
The second, and arguably more damaging piece, is a new rate provision guaranteeing that prices only move in one direction. Insurers would be required to offer providers the going market rate, and if a provider refuses that offer, the insurer must come back with an even higher one. There is no mechanism in the rule that brings prices back down. This provision hands consolidated hospital systems and large provider groups an easy playbook: refuse the first offer and demand more, every time, while families and employers absorb the difference through higher premiums year after year.
Why This Matters
It’s worth retelling what Dr. Zach Cooper of Yale University said in a recent Texas House Select Committee on Health Care Affordability hearing: hospital prices have already been the leading driver of a 320% increase in insurance premiums over the past 25 years. Since 2000, hospital prices have risen faster than prices in nearly every other provider category.
Healthcare affordability is already stretched thin for Texas families, and lawmakers have spent the last several sessions working to bring costs down. Every policy that increases costs while limiting affordable choices pushes more Texans toward going uninsured, and Texas already has the highest uninsured rate in the nation.
TAHC's Recommendations
In our comment letter, submitted on behalf of the thousands of Texas families and businesses TAHC represents, we made the case that these rules move in exactly the wrong direction at exactly the wrong time. We urged TDI to:
Revise the final rule so that it does not exceed federal network adequacy standards
Remove the rate mandate provision entirely
Preserve the flexibility Texas families and employers need to find coverage that fits their lives and their budgets.
Looking Ahead
This fight is also a preview of the broader affordability battle TAHC is leading into the 90th Legislative Session. Rules like these, however well-intentioned, tend to entrench the market power of large, consolidated hospital and provider systems while limiting the competitive, consumer-first options that keep costs in check.
We'll continue watching this rulemaking process closely and will update members as TDI responds.
Share Your Story
Continue to share your story with us so that legislators know how their constituents are continually affected by this healthcare cost crisis and legislative and agency action.
Share your story today: https://www.texansforaffordablehealthcare.com/share-your-story